Examines the impact that the "Great Recession" of 2008 has had on gold value today as an investment and gold's prospects going forward.This report is significant because the value of gold has more than doubled since the beginning of the recession. This report discusses the history of gold prices, gold's appeal as a safe haven for investors, and the impact that the recession has had on gold's value in order to evaluate the legitimacy of the current valuation of gold. This report will give a recommendation as to where gold's investment value is going in the future. However, this recommendation is in no way a recommendation to buy, sell, or hold gold in any investment portfolio.
Significance of Problem: Gold's Current Valuation
Historically, over the past 40 years, the S&P 500 (the best single gauge of the large cap U.S. equities market) has significantly outperformed the rate of return on investment when compared with that of gold. However, in an effort by investors to protect their capital over the last decade from extremely volatile stock market fluctuations and low bong yields, investors have flocked to buying gold as a safe haven for their money.Many investors around the world have continued to purchase gold in abundances over recent years driving the price of gold to record highs providing large returns for investors. Investor's sentiment towards gold over the next few years will be very interesting to follow. Economies and businesses all over the world are continuing to work to increase productivity, raise capital, and regain their stability in an attempt to attract investors, which could have a large impact on gold's value. However, many economies and businesses are struggling to regain investors in anincreasingly competitive and global marketplace.